Creditors Face Losses as Austria Halts Hypo Alpe Support
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Hypo Alpe-Adria-Bank International AG bondholders face losses after the Austrian government ruled out providing fresh capital for its bad bank and staged a premiere of new European Union rules to wind down failing banks.
After 5.5 billion euros ($6.2 billion) of taxpayer money was injected into Hypo Alpe in the last five years, Chancellor Werner Faymann’s administration decided to stop supporting its bad bank, Heta Asset Resolution AG, after learning it would need another 7.6 billion euros. The shortfall will now be met by forcing losses on creditors using tools created by the EU’s Bank Recovery and Resolution Directive.